Crane Currency, the American printing giant which opened a Malta facility in 2016, recently announced it will close down a printing company in Tumba.

22 May 2018, 7:17am by Matthew Vella

A plan to shift the printing of the Swedish currency banknote in Crane Currency’s new Malta plant has hit the rocks it would seem, after the Swedish Central Bank declared it will prevent the country’s currency printing from moving to the island.

Crane Currency, the American printing giant which opened a Malta facility in 2016, recently announced it will close down a printing company in Tumba which has historically manufactured Sweden’s banknotes since 1755 – the only such printer in Sweden.

The plant was acquired by Crane from the Swedish Riksbank (central bank) in 2002 for €15 million.

While Crane will leave design and support functions in Tumba, the paper mill will be shuttered. Crane Currency president Annemarie Watson told its 170 employees that fierce competition and the existing infrastructure at the Tumba plant had forced the move. Crane Currency employs over 1,300 employees in six locations in the United States, Sweden and Malta.

But the news has not been welcomed by the authorities at the Riksbank that controls the country’s currency.

In a comment to MaltaToday, a spokesperson for the bank said Crane had notified the Riksbank last week that they will no longer print banknotes at their facility in Tumba.

“The Riksbank’s agreement with Crane clearly stipulates that the printing of Swedish notes should take place at Tumba. Printing Swedish banknotes on Malta would in that respect violate the agreement between the Riksbank and Crane,” spokesperson Tomas Lundberg said.

When asked what had motivated the Riksbank’s decision to prevent the printing of Swedish banknotes in Malta, the spokesperson said the central bank had never considered printing its banknotes in Malta.

“The first requirements for participating in the procurement to get an agreement to print Swedish banknotes has been for the banknotes to be printed in northern and or central Europe. When Crane won the last procurement we clarified further in the agreement that the banknotes had to be printed in Tumba. In line with that, printing the Swedish banknotes in Malta has never been an option.

“The Riksbank is now continuing to work to find a good solution for the continued production of Swedish banknotes.”

The reaction also came hot on the heels of a broadcast on Swedish TV4 News earlier in the week, which delved into the role of the Prime Minister’s chief of staff Keith Schembri in securing the €100 million investment from Crane Currency.

Joseph Muscat had already described Schembri – whose group of companies includes a paper merchant as well as a print engineering unit – as “the catalyst in making sure that things get done” in negotiations with the Boston currency giant.

It later transpired that Schembri’s company, Kasco Technical Services, was the Malta agent for Komori, a company that supplies Crane’s printing machines. The Opposition Nationalist Party cried foul, accusing Schembri of a blatant conflict of interest as a result of his business interest in the deal.

Schembri had however said Kasco would not be supplying Crane with any machinery but that it could carry out servicing for the American currency printing company. “Having knowledge of the industry, I can confirm that currency printing machinery requires strict security features and specifications and therefore such machinery is not acquired through third parties but directly from the manufacturer.”

According to the Riksbank’s head of payments, Christina Weishammar, any future printing of krona will be limited to northern Europe once the Riksbank issues a new tender for the currency printing. She was answering questions from business newspaper Dagens Industri as to whether Crane could win a new procurement contract, using its Malta facility.

News of the Tumba closure has now prompted criticism by Swedish MPs, among them Moderate Party MP Lotta Olsson who asked finance minister Per Bolund to change the rules and ensure that Swedish banknotes are printed in Sweden. “My belief is that you must have a banknote that is physically in Sweden. It feels very strange if it is sent abroad… Even though we do not use paper money everyday, we have to think about what happens during a crisis,” Olsson told Aftonbladet.

It is strange that they didn't make a fuss about Myntverket being closed and Swedish coins being minted in Finland.

Finland is a nordic neighbour.

Malta, well, how shall I put it, has a whiff (if not more) of corruption and other unsavoury things surrounding it recently. Not good in the eyes of a politically so correct country like Sweden. Plus, the loss of jobs. Bad for politcians everywhere. It'll be interesting to see how this thing goes forward.

Provided that what the Swedish central bank says about the deal it has with Crane AB is correct, printing SEK notes in Malta would be a breach of that contract. In that case, the Riksbank does of course have the right to look for alternative options. The next question however is, could a new call for tenders actually be limited to specific member states only?

could a new call for tenders actually be limited to specific member states only?

In principle, under the rules of the WTO agreement on government procurement, Sweden cannot exclude any WTO member that subscribes to the agreement. Crane could easily be excluded if there is breach of contract, though.

In practice, Sweden has some options to evade the WTO agreement, such as citing military considerations, which is what MP Lotta Olsson does in the article above, an emergency (lack of banknotes) or funny quality demands (practical experience with the effect of the Nordic climate on banknotes.) Those options are fake, but Sweden would not be the first country to use them and it wouldn't be the first time Sweden exercises protectionist options.

Peter

« Last Edit: May 24, 2018, 05:27:56 PM by Figleaf »

Logged

An unidentified coin is a piece of metal. An identified coin is a piece of history.

Thanks for the insight! Well, the neighbor Denmark picked the Mint of Finland for the production of its coins (just like Sweden), and Oberthur (FR) as the manufacturer of its notes. Let's see where future SEK notes will come from ...

Thanks for the insight! Well, the neighbor Denmark picked the Mint of Finland for the production of its coins (just like Sweden), and Oberthur (FR) as the manufacturer of its notes. Let's see where future SEK notes will come from ...

Christian

Both Norway and Denmark have chosen Oberthur for the manufacture of its notes. Norway pay 0.55 NOK per note. I am not sure where Iceland gets their notes produced.

Giesecke & Devrient in Germany, prints currency for five dozen countries, and Canadian Banknote fills orders for 20.

I saw one article that said that the smallest cheapest note printing equipment can produce up to 1 billion banknotes per year. That seems like a lot as Canada only has just over 2 billion of the new polymer notes. It is possible that there is some cooperation between Canada, Australia, and New Zealand as they all license the technique for polymer notes from Note Printing Australia https://www.noteprinting.com/.

As 25% of Swedish banknotes are the 20kr denomination, this latest development may make the government take another look at developing a 20kr coin.

Of course, if Sweden wants to discourage cash payments from their already ridiculously low level, they should convert both the 20kr and 50kr banknotes to coins .

Here is a little table to show how many millions of banknotes and 20kr coins are circulating. Keep in mind that Sweden has nearly double the population so the per capita circulation is considerably lower

SEK : Denom : NOK : Denom : DKK

50.9 : 20 kr : 88.7 : 20 kr : 127.3

19.2 : 50 kr : 22.4 : 50 kr : 25.1

30.8 : 100 kr : 21.6 : 100 kr : 46.3

28.3 : 200 kr : 29.2 : 200 kr : 31.8

72.4 : 500 kr : 35.4 : 500 kr : 34.6

3.4 : 1000 kr : 15.6 : 1000 kr : 34.8

204.9: Notes : 124.1 : Notes : 172.5

I am not sure what is up with Sweden and the 1000kr banknote. It seems to make little or no sense to have a banknote with such incredibly low circulation figures (one note per three people). Sweden does not publish production quantities as they consider it a state secret. Most countries (including Norway) publish production quantities as well as circulation figures.

So possibly Sweden is sitting on a roomful of 1000kr banknotes which can be circulated if there is a coronal mass ejection (a significant release of plasma and magnetic field from the solar corona) like the one in 1859 . The storm took down parts of the recently created US telegraph network, starting fires and shocking some telegraph operators. Nobody knows what would happen to SWISH today.

We don't even know how many banknotes were bought from Crane before the contract was cancelled. It could be that the Riksbank has five years of notes in storage.

In any event it looks like if you replace a banknote with a coin, you need a lot more coins as they are more likely to end up in drawers.

I think most people assume that the Riksbank is going to issue an e-krona as no government institution in the world studies something for over a year and then concludes that it is not worthwhile to do.

South Korea's smallest banknote is worth 7.84 SEK, and their largest is worth 392 SEK. They are going to demonetize their coins in three years. Once the coins are demonetized, you will have to either pay electronically or receive your change electronically or simply abandon your change. Abandoning will not be a bone crushing option once in a while, as it will be less than 8SEK, but most people will switch to electronic payments. The affect will probably be to reduce the requirements for smaller banknotes as well, but the largest note (worth 392 SEK) may remain just as popular for gifts, private transactions, illegal transactions, and buying used cars, or for simple privacy.

A radical idea for Sweden is to simply to do the same thing by converting the two smallest denominations into coins. The 50kr coin would be fairly abnormal as only Japan and Switzerland have coins of similar value, but then no country has issued an electronic currency like the e-krona before.

As I said earlier, unless Sweden is preparing for a CME event (or a zombie apocalypse) they might as well get rid of the 1000kr banknote as circulating such small numbers if stupid.

When the Riksbank lets a new contract for currency production, they may only need a few hundred million banknotes in the denomination 100, 200 and 500 and that should hold them for a decade.

Under the most radical of all options you would keep the 500 SEK banknote and the coins, and most people will get their change back on a card. That would reduce cash purchases to a very specialized t type of purchase mostly involving tourists and private transactions involving gifts. Also included would be people who want two or three days worth of money under their bed in a private safe.

I think most people assume that the Riksbank is going to issue an e-krona as no government institution in the world studies something for over a year and then concludes that it is not worthwhile to do.

Not trueUSA has been studying change of metals/alloys for their coins for nearly a decade and still not decided.

Government bureaucracies take their own time to justify continued existence of their jobs.

Many Central Banks have studied block chain methods and e-currencies after Bitcoin became popular and have not only rejected them but also banned them. More Central banks still continue to study them. Only Venezuela has finally issued "Petro" as e- currency.

Many countries have announced the introduction of new denominations or new series of coins ( smaller/ cheaper ) but have failed to do so far. Examples are Honduras, Iceland, India, Nigeria, Maldives, Lebanon etc.

Philipines took more than 6 years to decide about new series of coins.

Replacement of lower denomination notes by coins is an economic analysis and most countries tend to follow D- Metric method, sponsored by De La Rue company ( yes, that note printing company). This was developed by Dr L C Payne in 1980s and I am enclosing a slide for such exercise of Newzealand for reference.